Hamas should not be included on the European Union’s list of terrorist organisations, the EU’s second-highest court ruled today.

The General Court of the European Union concluded that the EU had failed to provide adequate evidence to support its designation of the Palestinian movement, which controls the Gaza Strip, as a terrorist organisation. It said that the EU had relied on media and internet reports.

The EU will be able to continue to freeze Hamas’s assets for another three months, as member states consider how to respond to the judgment. The EU’s member states have two months in which to appeal against the ruling at the EU’s senior court, the European Court of Justice.

The court’s decision comes 13 years after the EU added Hamas to its list of terrorist organisations and several months after Hamas and its rival, Fatah, which is not on the EU blacklist, agreed to allow the Palestinian Authority to run the government in Gaza.

The office of Federica Mogherini, the EU’s foreign policy chief, said that the EU’s institutions would take “appropriate remedial action, including any eventual appeal to the ruling”. It also emphasised that the ruling was “clearly based on procedural grounds and it does not imply any assessment by the Court of the substantive reasons for the designation of Hamas as a terrorist organisation”.

The General Court had made a similar statement. “The court stresses that those annulments, on fundamental procedural grounds, do not imply any substantive assessment of the question of the classification of Hamas as a terrorist group,” it said in announcing its judgment.

It said that the EU’s decision to blacklist Hamas was based on “imputations derived from the media and the internet”, rather than on a “concrete examination” of the case against Hamas.

The court used the same reasoning on 16 October to annul the listing of the Liberation Tigers of Tamil Eelam – more commonly known as the Tamil Tigers – on the European list of terrorist organisations.

Israel’s prime minister, Binyamin Netanyahu, said that Israel expected the EU “to immediately return Hamas to the list where everyone realises they should be”.

Netanyahu described Hamas as “a murderous terrorist organisation whose charter says that its aim is to destroy Israel”.

Today’s ruling is a blow to the EU’s decision-making process on sanctions, which is currently facing legal challenges from, among others, a daughter of the late Libyan leader Muammar Qaddafi and the Iranian National Oil Corporation. Other challenges to EU sanctions have been lodged by members of the former governing elite in Ukraine and by a range of Russians and Russian companies, including the oil company Rosneft and the banks Vnesheconombank, Prominvestbank, and VTB.

The challenges to EU sanctions are one reason frequently given by EU officials to explain the discrepancy between the EU and US sanctions imposed on Russia during the Ukraine crisis.